TABLE OF CONTENTS

OVERVIEW

In January, 2001, the New Hampshire Supreme Court issued a decision in the case of Simplex Technologies, Inc. v. Town of Newington. ⁽¹⁾ This decision has significantly changed the criteria by which a variance to a zoning ordinance is to be analyzed and will have a major impact upon land use planning in the future. Prior to this decision, the standards governing determinations of unnecessary hardship were quite rigid and allowed little flexibility on the part of local zoning boards when considering requests for variances. The balance between the powers of the municipalities to regulate land use and the rights of landowners to use their property as they saw fit was tilted significantly in favor of the regulators. Because of the Simplex decision, however, the balance has shifted in the other direction so that more weight will be given in the future to the constitutional property rights of landowners.

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BACKGROUND

In order to understand the impact of the Simplex decision, it is appropriate to discuss some of the backdrop of New Hampshire constitutional and statutory law in dealing with zoning, planning and other aspects of land use.

In New Hampshire, the right of people to acquire, possess and protect property is protected by Part I, Article 2 of the New Hampshire Constitution. Thus, "[o]wnership, use and enjoyment of property is a fundamental personal right." ⁽²⁾

Balanced against the personal rights of property owners is the so-called "police power" of the State and its subdivisions (e.g., cities and towns). This power "is an inherent attribute of state sovereignty."⁽³⁾ In New Hampshire, the police powers delegated to towns include the power to enact laws to promote public health, welfare and safety. ⁽⁴⁾ The test to determine whether a provision of a zoning ordinance properly balances the police power of the town against the property rights of the owner, is whether such a provision is " 'reasonable, not arbitrary, and . . . rest[s] upon some ground of difference having a fair and substantial relation to the object of the legislation.' " ⁽⁵⁾

In order to ensure further that the police power of the towns is applied fairly, the New Hampshire Legislature has given local zoning boards the power to:

This law has been in force in New Hampshire in essentially the same form for over half a century and is the source of all New Hampshire law governing the power and the duty of local zoning boards of adjustment to grant so-called "variances" from the provisions of zoning ordinances.

The power to grant variances was created "to prevent the ordinance from becoming confiscatory or unduly oppressive as applied to individual properties uniquely situated." ⁽⁷⁾ It is the "safety valve" of zoning law which allows " 'a waiver of the strict letter of the zoning ordinance without sacrifice to its spirit and purpose.' " ⁽⁸⁾

Over the years, New Hampshire courts have interpreted the language of N.H. R.S.A. 674:33 (b) to mean that for a local zoning board to grant a variance, it must first find all of the following conditions to be present:

Of the five variance criteria, the one that has caused the most difficulty for applicants and, in turn, local zoning boards, has been the requirement that an "unnecessary hardship" be demonstrated. The New Hampshire courts have developed a test for determining whether a restriction would result in unnecessary hardship which, in essence, required the applicant or landowner to prove two things. First, he or she had to prove that " '[t]he hardship . . . arise[s] from a special condition of the land which distinguishes it from other land in the same area with respect to [its] suitability for the use for which it is zoned.' " ⁽¹¹⁾ In order to meet this part of the test, the landowner had to show that "[t]he hardship . . . relate[s] to the special character of the land rather than to the personal circumstances of the landowner." ⁽¹²⁾ Second, "[f]or hardship to exist . . ., the deprivation resulting from application of the ordinance must be so great as to effectively prevent the owner from making any reasonable use of the land." ⁽¹³⁾

It is the second part of this test which has been the more difficult for landowners to meet. In essence, if, without the variance, the property could reasonably be used for any permitted use, no variance would be legally possible. Therefore, any property which had in the past been used for anything would be ineligible for a variance.

The difficulty faced by property owners as a result of this test is illustrated by the decision of the New Hampshire Supreme Court in the matter of Crossley v. Town of Pelham. ⁽¹⁴⁾ The Crossleys were abutters to a small lot which contained a single family dwelling with a one-car garage on the edge of Little Island Pond in Pelham, New Hampshire. The lot was nonconforming because of insufficient frontage on the pond and insufficient acreage, but was grandfathered. The owners of that lot (the Ogonowskis) removed the one-car garage and applied for a variance to replace it with a two-car garage twice the width and height of the old one. The variance was granted by the town zoning board over the objection of the Crossleys, who then appealed to the superior court. The superior court affirmed the decision of the zoning board; however, the New Hampshire Supreme Court reversed, saying that there was no "basis to find that requiring the Ogonowskis to dwell at the side of the pond without a two-car garage would deprive them of all reasonable use of the property. They lived there without a two-car garage for five years and could, indeed, occupy the house for its permitted residential purpose without any garage at all." ⁽¹⁵⁾

The rigidity of decisions such as Crossley made it extremely difficult for local zoning boards legitimately to allow variances in all but the most extreme circumstances. The only legal remedy for a landowner wishing to obtain a variance where the property was reasonably capable of supporting a permitted use was to seek a change in the zoning ordinance itself, a cumbersome process at best. Recognizing the problem, many zoning boards around the State took a pragmatic approach and simply "fudged" the analysis of the hardship criteria when their "common sense" told them that the request was reasonable -- particularly when the abutters did not object to granting the variance. While this probably resulted in "rough justice" in cases where the abutters did not object to the variance, the strict criteria tended to place landowners at the mercy of their neighbors who did object, sometimes unreasonably.

The rigid "hardship" rule was not without its critics. For example, in the case of Grey Rocks Land Trust v. Town of Hebron, ⁽¹⁶⁾ Justice Sherman Horton wrote a strong dissent stating his position that the existing hardship test was too restrictive. Justice Horton maintained that while the zoning power of a municipality is normally a reasonable exercise of the police power, "[t]he determination of the reasonableness of a city's or town's regulation involves 'a balancing of the injury or loss to the landowner against the gain to the public.' [Citation omitted] Any analysis starts with the constitutional principle that a property owner may use his property in any reasonable way he sees fit and then looks to see if the regulation is appropriate." ⁽¹⁷⁾ Justice Horton went on to say that the purpose of the variance procedure is to act as a "safety valve" and to "save[] [an] otherwise valid zoning ordinance from death at the hands of property owners with site-specific constitutional claims." ⁽¹⁸⁾ Justice Horton said further:

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THE SIMPLEX DECISION

Simplex Technologies, Inc., was the owner of nearly 100 acres zoned for industrial use in Newington, New Hampshire. Wishing to develop approximately six of those acres as a book store and a family restaurant, ⁽²⁰⁾ Simplex applied for the necessary variances. The Newington ZBA denied the applications, finding that Simplex met none of the five variance criteria. ⁽²¹⁾ Simplex appealed to the superior court, which affirmed the denial, ruling that Simplex did not meet the hardship criteria.

The New Hampshire Supreme Court reversed the superior court decision, specifically overruling prior law defining "unnecessary hardship." In its opinion, the Court agreed with Justice Horton that the current approach to hardship analysis " 'rejects any claim of right to use property as one sees fit, no matter how unobtrusive.' " ⁽²²⁾

Primarily because it felt that the approach defined in Governor's Island was not consistent with the fundamental constitutional property rights of landowners, the Court established a new definition of "hardship" saying:

So now we have a new definition of "unnecessary hardship." How do we apply it? What is meant by the terms "reasonable use" and "unique setting of the property in its environment?" How does one determine whether a "fair and substantial relationship exists between the general purposes of the zoning ordinance and the specific restriction on the property," or when "the variance would not injure the public or private rights of others?"

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THE IMPACT OF SIMPLEX

Any time the Supreme Court overturns settled law and establishes new standards there will be a period of confusion as new law is defined and clarified in the light of experience. While, at first blush, it may seem that the Court has set local zoning boards adrift in uncharted waters,⁽²⁴⁾ it did give some clues as to how the justices will apply the "new" standard. I used quotation marks because, in Simplex, the Court clearly saw its decision as a return to well-established legal principles, rather than as a departure from them. The Governor's Island standard was seen as the aberration.

Most of the clues are provided in the cases the Court cited in support of its decision. Chief among these is Justice Horton's dissent in Grey Rocks. And most telling as a signal of how they intend to review zoning cases in the future is the comment by the justices that the former "restrictive approach is inconsistent with our constitutional analysis concerning zoning laws. To safeguard the constitutional rights of landowners, we insist that 'zoning ordinances must be reasonable, not arbitrary, and must rest upon some ground of difference having a fair and substantial relation to the object of the regulation.' " ⁽²⁵⁾

This is not to say that application of the Simplex hardship criteria will be easy in all circumstances, particularly because there appears to be considerable overlap not only among the three newly-stated hardship criteria, but also among the hardship criteria and some of the other four variance criteria.⁽²⁶⁾

The following cases cited in the Simplex decision appear to have been relied on by the Court and will likely shape its analysis of future "hardship" cases.

Grey Rocks Land Trust v. Town of Hebron ⁽²⁷⁾

Much of the significance of Justice Horton's dissent in Grey Rocks to the Simplex decision has been discussed at length already. That case involved an application by one William Robertie, doing business as the Newfound Lake Marina, Inc. (which operated a business as a pre-zoning nonconforming use) for a variance to construct an additional boat storage building. The ZBA granted the variance after a hearing, and over the objection of an abutter, the Grey Rocks Land Trust. Upon appeal, the superior court affirmed the decision of the zoning board. Citing its decision in Governor's Island, the New Hampshire Supreme Court reversed, saying:

It was for just such reasoning that Justice Horton took the others to task in his dissenting opinion. When a variance is unavailable unless no reasonable use of the property is possible without it, that amounts to a " 'substantial taking' " approach which completely undermines the very reason for variances in the scheme of things.⁽²⁹⁾ The variance procedure recognizes that while a zoning ordinance as a whole may be a perfectly legitimate and constitutional exercise of the police power, there may nonetheless be properties within a town upon which the impact of the ordinance would, in fact, be unconstitutional without the relief of the variance procedure. ⁽³⁰⁾ The lesson to be taken from Justice Horton's dissent, therefore, is that the primary job of a zoning board when considering an application for a variance is to weigh carefully the rights of the landowner against the public benefit to be gained by enforcing the literal terms of the ordinance. In other words: to analyze whether the impact of the ordinance upon the applicant is, in fact, a constitutional exercise of the police power. This is the target at which the three elements of the Simplex hardship definition are aimed.

Fortuna v. Zoning Board of Manchester ⁽³¹⁾

This case involved the application by an automobile dealership located in a residential zone for a variance to expand its nonconforming use. The variance was granted by the ZBA, and upheld on appeal by the superior court, over the objections of the abutters (plaintiffs). In affirming the decision of the superior court, the New Hampshire Supreme Court said:

Fortuna thus stands for the proposition that a use of property will generally be regarded as "reasonable" when its impact upon neighbors or the public at large is slight, non-obtrusive or even beneficial. Preventing an owner from making such a use of his or her property is considered an "unnecessary" hardship.

Belanger v. City of Nashua ⁽³³⁾

The plaintiff, Mary Belanger, occupied a two-story building on Main Street in Nashua in an area zoned for residential use. She lived on the second floor and operated a real estate office (a nonconforming use) on the first floor. She filed an application for a variance to enable her to expand the business to both floors of the house. The evidence before the board was to the effect that the neighborhood had undergone significant change since the zoning ordinance was enacted and had become more commercial and less residential over the years. The board, nonetheless, denied the variance on the basis that the variance was "not in the 'spirit of the ordinance.' " ⁽³⁴⁾ The superior court reversed the decision of the zoning board and the Supreme Court affirmed on the basis that "municipalities must . . . have their zoning ordinances reflect the current character of neighborhoods." ⁽³⁵⁾

While not, strictly speaking, a "hardship" case, it is likely that Belanger was cited in Simplex for the proposition that a change in the character of the neighborhood can be considered to be the "special conditions" needed to support the "unnecessary hardship" criteria. ⁽³⁶⁾ For example, if a landowner wishes to convert an old Victorian home in a residential zone to an office building, the fact that such conversions have been taking place in the neighborhood over a period of time may be weighed when deciding whether a restriction against such conversions "interferes with [his or her] reasonable use of the property, considering the unique setting of the property in its environment." ⁽³⁷⁾

Bouley v. City of Nashua ⁽³⁸⁾

This case was cited in Simplex for the proposition that "[b]y allowing variances 'litigation of constitutional questions may be avoided and a speedy and adequate remedy afforded in cases where special conditions' exist." ⁽³⁹⁾ The case involved a request by a landowner to construct a service station on a vacant lot (locally regarded as an eyesore) in a residential zone. The landowner's request for a variance was granted by the zoning board over the objection of neighbors and affirmed by the superior court after a hearing which included a view of the lot and the testimony of witnesses. ⁽⁴⁰⁾ In its decision the trial court found that the lot was in a deteriorating condition and that it was unlikely that anyone would purchase it to build a residence. ⁽⁴¹⁾ In upholding the variance, the Supreme Court said:

Such a statement can only mean that in some cases, at least, financial hardship can amount to "special conditions."

Town of Chesterfield v. Brooks ⁽⁴³⁾

This case did not arise out of a request for a variance, but involved a challenge to the constitutionality of a provision of a zoning ordinance which required a setback for mobile homes (but not for site-built homes) of 500 feet from paved (but not from gravel) roads. For a number of reasons set forth in the decision, the court found that there was no "substantial relationship" between the restriction and the purported goals of the regulation, and, therefore, the regulation was unconstitutional. ⁽⁴⁴⁾ Brooks was cited in Simplex for the proposition that "[t]o safeguard the constitutional rights of landowners, we insist that zoning ordinances 'must be reasonable, not arbitrary, and must rest upon some ground of difference having a fair and substantial relation to the object of the regulation.' " ⁽⁴⁵⁾ It likely indicates the future direction of the justices' thinking concerning whether a "fair and substantial relationship exists between the general purposes of the zoning ordinance and the specific restriction on the property." ⁽⁴⁶⁾ If a restriction, when applied to the applicant's property, does not accomplish what the ordinance intended, it is likely that an "unnecessary hardship" will be found.

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CONCLUSION

A close analysis of the new criteria will reveal that they will not lend themselves to a step by step approach, since they all appear to be interdependent. For example: it is very difficult to envision a situation where a landowner's use of his or her property could ever be regarded as "reasonable" if it has the effect of "injur[ing] the public or private rights of others" or if a "fair and substantial relationship exists between the general purposes of the zoning ordinance and the specific restriction on the property." ⁽⁴⁷⁾

It is dangerous, no doubt, to make too many predictions concerning the future direction of the law in this area; however, I think it is safe to say that ZBA's will have considerably more flexibility in the future to decide whether or not the hardship test is met by a given applicant. Application of the Simplex criteria is not likely to be mechanical at all, but instead each case will call for the intelligent employment of judgment and, yes, "common sense" to reach a just result. The outcome of each case will depend on its own circumstances, and there is little in the new criteria to suggest the creation of rigid rules of law such as characterized the old Governor's Island approach. Findings under the Simplex standards are more likely to be regarded as factual determinations which will require greater deference by the courts. ⁽⁴⁸⁾

While this will have the effect of increasing our autonomy as a zoning board, it also imposes a greater responsibility on us to get it right in the first place, since the citizens for whom we work will be less likely to find relief from the courts if we get it wrong.

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Notes:

1. 98-409 (N.H. Jan. 29, 2001).

2. Town of Chesterfield v. Brooks, 126 N.H. 64, 67, 489 A.2d 600, 602 (1985). Citing Gazzola v. Clements, 120 N.H. 25, 30, 411 A.2d 147, 151-152 (1980) and Metzger v. Town of Brentwood, 117 N.H. 497, 502, 374 A.2d 954, 958 (1977).

3. Piper v. Meredith, 110 N.H. 291, 294, 266 A.2d 103, 106 (1970), citing Peirce v. New Hampshire, 5 U.S. 554, 582 (1847).

4. See N.H. R.S.A. 31:39; Girard v. Town of Allenstown, 121 N.H. 268, 428 A.2d 488 (1981) and Piper, supra.

5. Brooks, 126 N.H. at 69, 489 A.2d at 604, quoting from Carson v. Maurer, 120 N.H. 925, 932, 424 A.2d 825, 831 (1980).

6. N.H. R.S.A. 674:33 (b).

7. Ouimette v. City of Somersworth, 119 N.H. 292, 294, 402 A.2d 159, 161 (1979). See also Sprague v. Town of Acworth, 120 N.H. 641, 644, 419 A.2d 1075, 1076 (1980).

8. Husnander v. Town of Barnstead, 139 N.H. 476, 478, 660 A.2d 477, 478 (1995) citing Grey Rocks Land Trust v. Town of Hebron, 136 N.H. 239, 246, 614 A.2d 1048, 1052 (1992) (Horton J., dissenting) and New London v. Leskiewicz, 110 N.H. 462, 466, 272 A.2d 856, 859 (1970).

9. In 1999, the New Hampshire Supreme Court changed the second criterion so as to return to the original statutory language. An applicant for a variance need no longer prove that granting the permit would benefit the public interest, but need only show that granting the permit would not be contrary to the public interest. Gray v. Seidel, 143 N.H. 327, 329, 726 A.2d 1283, 1284 (1999).

10. Gelinas v. City of Portsmouth, 97 N.H. 248, 250, 85 A.2d 896, 898 (1952).

11. Governor's Island Club, Inc. v. Town of Gilford, 124 N.H. 126, 130, 467 A.2d 246, 248 (1983), citing Ryan v. City of Manchester Zoning Board, 123 N.H. 170, 173, 459 A.2d 244, 245 (1983).

12. Associated Home Utilities, Inc. v. Town of Bedford, 120 N.H. 812, 817, 424 A.2d 186, 190 (1980).

13. Governor's Island, 124 N.H. at 130, 467 A.2d at 248.

14. 133 N.H. 215, 578 A.2d 319 (1990).

15. Id., 133 N.H. at 217, 578 A.2d at 320.

16. 136 N.H. 239, 614 A.2d 1048 (1992).

17. Id., 136 N.H. at 246, 614 A.2d at 1052 (Horton J., dissenting).

18. Id.

19. Id., 136 N.H. at 247, 624 A.2d at 1053.

20. Uses which were deemed "commercial," rather than "industrial."

21. See Gelinas, supra.

22. Grey Rocks, 136 N.H. at 247, 614 A.2d at 1052 (Horton, J., dissenting).

23. Simplex Technologies, Inc. v. Town of Newington, 98-409 (N.H. Jan.29, 2001).

24. Some might add, ". . . which are full of sharks!"

25. Simplex, supra, quoting from Brooks, 126 N.H. at 129, 489 A.2d at 604.

26. E.g., It is difficult to discern any practical difference between the Gelinas/Seidel requirements that the variance not be contrary to the public interest and that it not diminish surrounding property values, and the "new" Simplex requirement that it "not injure the public or private rights of others."

27. 136 N.H. 239, 614 A.2 1048 (1992) (Horton, J., dissenting).

28. Id., 136 N.H. at 243-244, 614 A.2d at 1050.

29. Id., 136 N.H. at 247, 614 A.2d at 1052 (Horton, J., dissenting).

30. Id.

31. 95 N.H. 211, 60 A.2d 133 (1948).

32. Id., 95 N.H. at 213-214, 60 A.2d at 135.

33. 121 N.H. 389, 430 A.2d 166 (1981).

34. Id., 121 N.H. at 392, 430 A.2d at 169.

35. Id., 121 N.H. at 393, 430 A.2d at 169.

36. N.H. R.S.A. 674:33 (b).

37. Simplex.

38. 106 N.H. 79, 205 A.2d 38 (1964).

39. Simplex, citing Bouley v. Nashua, 106 N.H. 79, 84, 205 A.2d 38, 41 (1964).

40. Bouley, 106 N.H. at 80, 205 A.2d at 39.

41. Id., 106 N.H. at 82, 205 A.2d at 40.

42. Id., 106 N.H. at 83, 205 A.2d at 40.

43. 126 N.H. 64, 489 A.2d 600 (1985).

44. Id., 126 N.H. at 69, 489 A.2d at 604.

45. Simplex, citing Brooks, 126 N.H. at 69, 489 A.2d at 604.

46. Simplex.

47. Id.

48. N.H. R.S.A. 677:6.